In the recent past, many people have been voicing out the need to increase the minimum wage by both the federal and state policies. They argue that, an increase in the minimum wage will not affect the economy negatively as most economists suggests. The article Minimum wage increase would have mixed effects, C.B.O Report Says dated February, 18, 2014 authored by Annie Lowrey in The New York Times clarifies this issues using supported evidences. It explains that, the popular Democratic by proposal that is being championed by Obama to push the minimum wage to 10.10% an hour will create adverse effects to our economy. It argues that, if this proposal is passed, the total employment opportunities would be reduced by 500,000 workers by the last phase of 2016. Nonetheless, it also adds that this move will be able to move more than 900,000 families out of poverty by increasing their net income.
According to my understanding, a higher minimum wage would be able to offset at least a part, if not all, the general effects by helping increase the rate of spending by the low income earners in the country. This is the mixed conclusion that was derived from the assessment. It creates confusion on the way forward in regard to this issue since raising the minimum age would affect the employment level, incomes and also the federal budget. To further expound on this issue, Jason Furman, the chairman of the White House Council of Economic Advisers, added that his office had estimated that the potential jobs that would be lost if the minimum wage could be increased will be higher than the report claims. Generally, I am of the opinion that the major reason why the wages are very low is because there is a large pool of uneducated workers, therefore, if the government could be able to control this number, then the wages will increase automatically.
Works Cited
Lowrey, Annie. The New York Times, Business Daily. Minimum Wage Increase Would Have
Mixed Effects, C.B.O. Report Says, Feb. 18, 2014. Retrieved from
http://www.nytimes.com/2014/02/19/business/mixed-results-in-us-study-of-increasing-minimum-wage.html?hp&_r=0 date Accessed, Feb, 19, 2014
